Pricing Probe Leads to Countrywide Settlement

Countrywide Home Loans has agreed to improve its pricing on mortgage loans to blacks and Hispanics as a result of an investigation by New York Attorney General Eliot Spitzer into the giant lender's Home Mortgage Disclosure Act data."This agreement should serve as a model for other lenders who, like Countrywide, seek to eradicate racial and ethnic disparities in mortgage lending," Mr. Spitzer said. Based on an outside analysis of Countrywide's pricing, the New York attorney general concluded that black and Latino borrowers paid more than whites on average, especially for loans generated by mortgage brokers. Countrywide has agreed to compensate minorities who "improperly" received subprime and alternative-A loans in 2004 and to implement a $3 million consumer education program in New York. Countrywide disputed the AG's findings and conclusions but cooperated with the inquiry. "Countrywide and Attorney General Spitzer share a common goal: to assure that all individuals who apply for a mortgage loan receive equal treatment, and any pricing differences should be based on credit, property, and other risk factors," Countrywide senior managing director Rick Wentz said.